What Are the Benefits of a Limited Liability Company in Texas?
Limited liability companies are not taxed as separate business entities.
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Whether you re establishing a new small business or changing the existing structure of that business, creating a limited liability company, or LLC, in the state of Texas has a few advantages. Texas limited liability company benefits include tax benefits, asset protection and ongoing support from the Texas Secretary of the State. Primarily, the benefit of a forming your small business as a limited liability company combines the characteristics of corporations and partnerships.
When registering a limited liability company in the state of Texas, the name choosen for the business receives protection from use by any other company in the state. Protecting the name of an LLC ensures that the reputation and brand image of the business is protected.
Forming a LLC in Texas also can provide the business with tax benefits. In a Texas limited liability company, operating costs and business expenses can be deducted from the gross revenues of the business. Texas limited liability companies also can deduct depreciation of the company assets as part of the balance sheet of the limited liability company.
Protects Personal Assets
In Texas, a limited liability company business structure meets state regulations but also protects the members (owners) of the limited liability company. If a Texas limited liability company undergoes a lawsuit, while the creditor or personal filing charges against the limited liability company can pursue the assets of the business, the lawsuit cannot touch the personal assets of the members of the limited liability company.
Secretary of State Support
When you register a limited liability company in the state of Texas, you are registering the business with the state. The state acts as a support system for the limited liability company, which includes protection under the provisions set by the Texas Business Corporation Act (TBCA) and the Texas Miscellaneous Corporation Laws Act (TMCLA).
Flexible Profit Choices
While a limited liability company business structure is set by a federal law, the state of Texas chose to adopt the law, which allows businesses operating in the state to decide to structure the business as an LLC. With the adoption of the law, Texas permits limited liability companies to choose a federal tax structure that operates as a corporation or as a partnership. Texas does not have a state tax, but businesses must register with the state of Texas for the Texas Franchise Tax.
No Record Keeping Requirements
While corporations are required to keep meeting minutes and copious records, a Texas limited liability company is not required to establish or maintain these types of business records.
About the Author
Kristie Lorette started writing professionally in 1996. She earned her Bachelor of Science degree in marketing and multinational business from Florida State University and a Master of Business Administration from Nova Southeastern University. Her work has appeared online at Bill Savings, Money Smart Life and Mortgage Loan.
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